Saturday, 6 February 2016

OPINION: Privatization of the Power Sector: The Imperative of Stock Taking

Three years after the celebrated privatisation of the power sector in Nigeria, is it not in our national interest to take stock of the exercise? For a pivotal sector upon which the socio-economic growth of the nation revolves, the resounding answer is YES!  Like the Jews still waiting for the coming of the Messiah, Nigerians are yet to witness or appreciate the much anticipated miracle of privatisation. Using the media as a tool for opinion moulding, allegations of corruption and so many aspersions were cast on PHCN, staff and anything that has to do with them. The nation was told what she wanted to hear. First, Nigerians were made to believe that with privatisation, power supply shall be taken for granted. Second, that the alleged corruption bedeviling the power sector is a cankerworm which will be completely obliterated with the advent of privatisation and many more preposterous postulations.

 Contrary to the above wrong impression earlier created, the stark reality in the sector has proved otherwise. Nothing much has changed. We are still in the same middle of nowhere. Before the glory of one is taken away from him, the level of improvement recorded in the present power supply situation was to the credit of government not to the new owners or one occasioned by privatisation. The flawless managerial acumen the new owners claimed they will bring to bear, transformation and injection of funds and expected turn-around of men and materials promised are on record as mere wishful thinking or better still a mirage. Believe it or not, those who ventured into power business especially in the Discos came with the mindset to scooping free cash. In fact, they were disappointed as they have to contend with the stark reality of the rot in Transmission, Generation and Distribution infrastructure and even dearth of human capital development.
Most new owners of the privatised companies are broke and bereft of ideas. How could the management of a naïve and new company sack 99.9% of experienced technical and non-technical staff of a sector like power and expect to break even? Where lies the need for smooth transition from old to new and tutelage of the new employees? They also lack sufficient funds needed to transform an ageing but cost intensive vital sector of the economy. Apart from the Generation, Transmission and Distribution infrastructure put in place by government, the new owners are yet to expend one kobo on capital projects. Ask the new owners how much one meter of aluminum conductor costs. Provision of good and functional operational vehicles, fuelling, and availability of mere stationeries now hamper the promised efficient service delivery.
The new owners now look up to or rather coerce government for bail out and intervention fund to break even or they quit on account of loss of revenue. They have insisted on foisting a new tariff regime on Nigerians or no deal. It is no longer news that Integrated Energy Distribution and Marketing Company, owners of Yola Electricity Distribution Company had since fled the scene they much craved to occupy for lack of sufficient revenue accruing to them owing to activities of Boko Haram in the North East. Why should government provide a buffer or monetary incentive to a private business? With a notice of discontinuation of business, an undue and unfair compensatory package known as “force majeure” inserted into the contractual agreement takes care of whatever reason adduced to quit.  “Force majeure is a standard clause in most contracts which includes natural disasters, wars and other occurrences not within the powers or control of the executing party that makes implementation of the contract impossible.” This provision of the clause makes a woefully failed businessman a celebrated hero at expense of the nation. It is only in Nigeria that human beings could couch such a fraudulent agreement against the state and its people as a fall back mechanism for failure. There must be risk and some unforeseen circumstances in any business but how many of them do agreements take care of?
Three years after, the new owners are living in the past glory of PHCN as no ground breaking achievements have been recorded. The fulfillment of promises to promptly supply pre-paid meters to customers are only streaming on the social media, TV, radio and on the pages of newspapers. Installation of prepaid meters nationwide is a solution to reducing energy loss and a guarantee to the customer to personally manage and determine on his own the level of consumption. Privatisation was not the answer to the myriads problems in the power sector. In fact, availability of the scarce commodity in quantum was.  Nigerians in my estimation are ready and willing to pay any price provided there is sufficient supply to power their homes and business. The competition in the telecommunication sector and near efficient services they render dwarfed the tariff charge which was as high as Fifty Naira per minute at inception. Therefore, anyone or institution of government ready to impose new tariff regime without commensurate electricity supply is putting the cart before the horse. Utilisation of other viable alternatives such as solar and wind are tested-natural options that could bring us out of this predicament.  Coal, an important bye product of power generation buried beneath the earthly bowel of our nation should be exploited for availability of power. Construction of adequate transmission and injection substations, dependable transmission network that could comfortably wheel the energy generated should be the priority. Moreover, old and weak existing transmission network in the country need to be genuinely expanded and upgraded to accommodate more energy. We should learn to pay for utility services provided. It is our civic responsibility without being forced to do so with disconnection notices.  Nigerians build houses worth millions of Naira but shy away from paying for utility bills but prefer to induce electricity officials as a way out.
The entire power sector more than ever needs total and urgent overhaul. This current output was a far cry from what was bargained on our behalf. The searchlight currently beamed on TCN by the Senate of the Federal Republic of Nigeria should be well pointed to expose the unholy transactions at Distribution and Generation Companies as well because all are products of the same suspect process. Our children who were kids then are beginning to ask what happened to the $16 billion spent or allegedly squandered on the power sector by the administration ex-president Olusegun Obasanjo. Thorough investigation of the alleged scam and others in the sector once again provides the answer. Dasukigate will suffice as a child’s play compare to the deterioration in the power sector. With a second look at the entire privatisation processes of the power sector, the findings will shock and amaze all of us. The right time to act is now!
Sunday Onyemaechi Eze, a Media and Communications Specialist wrote via and can be reached on 08060901201

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